While an arms race might have been important in the past, it isn't what drives current civilisation.
And I hope it will stay that way.
At least in my country most of the intelligent Linux developers don't want to work for the weapons manufacturer. So they build less good soft/hardware as they could have otherwise.
Just like good developers don't want to work for Microsoft, because who wants to be associated with that?
The key thing is that I don't want to personally decide what is 'evil' and what is not.
But we are doing that right now with the GPLv3 already.
I believe that the EFF has a wonderful opportunity there to form a committee to make that definition and implement it legally.